October 4, 2022

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5 Reasons 2022 Will Be a Record Year in the US Economy

5 Reasons 2022 Will Be a Record Year in the US Economy

Analysts and economists are in agreement: if the Omigran variant does not throw a spanner into jobs, all cards are good for a strong fiscal year in the US, with growth above 4 percent. This is why they are so optimistic.

1. Willing to spend money on the rich

ING’s research department estimates that the combined wealth of American households (real estate and investments, but not cars and jewelry) has increased by more than $ 35,000 billion to nearly $ 163,000 billion since the outbreak began.

The value of non-financial assets, especially real estate, increased with financial investments with the stock market. As some trips and other travel expenses are not at all feasible, there are indications of further savings.

Especially rich families can continue to build their wealth in this way. ING economists and other experts expect the affluent families to be willing to spend large sums on entertainment, tourism and catering once the crisis around Corona eases.

2. Even the less affluent class will be better off

The same study shows that the purchasing power of low-income people has been able to improve their financial situation. Stencils Expansion of Biden Management and Unemployment Benefits. One step Initial study Thanks to the American research firm NBER, most recipients are better off than ever.

Support for low incomes is good news for manufacturers and distributors of basic goods because it keeps track of their consumption levels.

3. Companies are reinvesting

So family consumption seems to be in trouble. But another growth machine, business investment, also likes. According to property manager Schroeder’s analyst Bob Keiner, U.S. companies have been investing in new machinery and technology in recent years, capital expenditure or Capex (capital cost).

“From CapexThe cycle is significant in the United States. It has been many years since companies had the confidence to invest long-term capital. They used the extra money to repurchase their own shares, thereby increasing ratings in the future. Companies will now be thankful for the lower cost of capital and increased confidence. In addition, companies are now more careful in their supply chains. They bring production and suppliers closer together.

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The general expectation is that international supply chain problems will decrease by 2022, but container transport prices will remain high.

4. Biden launches incentive programs

You can also see the start of two large-scale stimulus plans that President Joe Biden plans to launch in 2022: the recently approved … Infrastructure project And not yet fully recognized Built Back BetterPlan including support activities for renewable energy projects and social security reform.

It’s about one Keynesians Ancient recipe: Large government spending should increase economic demand, create domestic jobs and modernize the basic skeleton of the US economy. Biden would consider the budget deficit, which could lead to such a stimulus policy, a necessary evil.

5. Powell felt the need to avoid overheating

According to some economists, many turbos are placed in the US economy, so there is a risk of overheating. This could push inflation to new heights. Jerome Powell, the Federal Reserve’s central banker, is playing a key role in curbing inflation through tight policies and interest rate hikes.

While it is always an achievement for Powell to find the right size, two things argue in his favor. He was joined by ECB President Christine Lagarde Wait-Belit Stays, is Powell Has already begun to reduce cash incentives. Moreover, the combination of high growth and high inflation is easy to manage – even if you put your foot firmly on the brakes – and then a combination of low growth and high inflation, which can cause inflation to rise, but reduce low growth.